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July 10, 2014

Time to Bury the Hachette

It’s a tough time to be an author advocacy organization. As you may or may not know, Science Fiction and Fantasy Writers of America (SFWA) has been catching a lot of flak about signing on to Douglas Preston’s letter asking Amazon to stop treating Hachette’s books differently from those of the other big publishers by refusing to accept pre-orders, refusing to discount prices, and slowing the delivery of Hachette books to Amazon customers.

SFWA wasn’t alone in signing the letter. Various prestigious authors, including Stephen King, Nora Roberts, John Grisham, at least two past SFWA presidents, and a few hundred other authors, many well known, also signed. Although the letter claims to not take sides in the Amazon/Hachette contractual negotiations, it is addressed only to Amazon, and several sentences seem decidedly biased toward Hachette.

The reaction, both inside the organization and outside, was fast and intense. The letter was perceived, rightly or wrongly, as an attack on Amazon, in which Hachette comes across as an innocent victim.

I’ve read the letter several times now, and I can see how it could be taken as being on Hachette’s side, but in my opinion the interpretations of it from both sides have been extreme. It’s almost as if a reader’s pre-conceived biases completely overshadow what’s actually in the letter. For example, there’s nothing in the letter that talks about self-publishing, but it has been taken by some as an attack on self-publishers. Admittedly, SFWA’s participation can be seen as continuation of a long-standing policy of excluding self-publishers, but still, self-publishing is not there in the letter, which, at least on its face, is pleading only for Amazon to change its policy towards Hachette books.

The traditional media, including the New York Times and Wall Street Journal, have portrayed Amazon as the bad guy here, hurting Hachette’s sales and authors deliberately as part of a negotiating strategy to get a better deal from Hachette. In a recent leaked proposal from Amazon floating the idea of a program to compensate authors hurt by the stand-off, Amazon seems to admit that it actually is doing in most of the things the Preston letter accuses it of, and could stop doing them if it so chose. Even that proposal is subject to reader bias, though. Many read it as a genuine offer, but others see it as a disingenuous ploy.

Hugh Howey, an author who has become a spokesperson to the self-published and who has studied the actions of Amazon and Hachette extensively, has put forward a compelling case that Hachette, in fact, is the bad actor here, and makes his case even more convincing by listing the worst aspects of the way Hachette treats its authors--and there are a lot of them, most especially the 25% of net digital royalty that it and the other big publishers force on their authors. He contends that Hachette is actually in the catbird seat, here, and has much less to lose than Amazon if the negotiations are not concluded successfully. Howey is also at least partly responsible for a petition on Change.org supporting Amazon that has garnered several thousand signatures at this point.

I think it’s safe to say that so far the Board of SFWA has tended towards the pro-Hachette position, but the organization’s primary purpose is to advocate for the Hachette authors, especially Hachette authors who also happen to be members. As a first approximation, the Preston letter at least seems to be doing that. Does the Preston letter make unwarranted assumptions about the battle between Hachette and Amazon? Who knows? The fact is, very few people outside those two companies know what’s really going on. Hachette could be the good guy, Amazon the bad guy. Or they both could be bad guys. Or both good guys. There’s an infinite smorgasbord of possibilities. How do you advocate for Hachette’s authors and remain completely neutral?

As I mentioned earlier, Amazon has put forth a tentative proposal to fix the problems in their ordering system that disadvantage Hachette authors, and compensate those authors for the harm done to them during the negotiations. Amazon offered to join with Hachette to pay the authors 100% of its proceeds for their ebooks while the negotiations continue, but only if Hachette agrees to also give all of its proceeds to the authors.

It sounds good, right? Amazon is clearly thinking of the authors, and is even willing to forgo its profit on those books. What could be fairer? Unfortunately, a closer look reveals the flaw: while Amazon would be sacrificing a small profit on a small percentage of its ebook sales, Hachette would be sacrificing a large profit on all of its ebook sales through Amazon (estimated as 60% of its ebook sales total in the USA, and even more in the UK). Hachette, not surprisingly, refused this offer in a matter of hours. Pundits opined that Amazon just made the offer as a publicity stunt, as a way to sway opinion to their side, at the same time making Hachette look like pikers.

No matter how it looks, I’m convinced that the proper course for SFWA and other author advocacy groups is to urge Hachette to negotiate a better, more fairly determined payment to the authors who have been harmed, or, if Hachette stonewalls, to ask Amazon to make good the harm independently.

Here’s an analogy: if you saw the most recent Superman movie, Man of Steel, you undoubtedly noticed how Superman and General Zod destroyed much of Metropolis during their battle at the end of the film. Should the people whose homes and business were destroyed accept compensation for the damage, even if it's offered by General Zod? What if you can’t tell who demolished your apartment building, Zod or Superman? What if you didn’t even know that Superman was the good guy?

The Authors Guild, perhaps predictably, is firmly on the side of Hachette. They’ve been issuing warnings about Amazon for years now, and there’s some indication that their failed settlement with Google was at least partly aimed at addressing Amazon’s dominance. Roxana Robinson, president of the Authors Guild, commented to the NYT: “If Amazon wants to have a constructive conversation about this, we’re ready to have one at any time,” she said in an email. “But this seems like a short-term solution that encourages authors to take sides against their publishers. It doesn’t get authors out of the middle of this — we’re still in the middle.”

If there is a better example of publisher-centric author advocacy, I haven’t seen it. Maybe Amazon’s offer doesn’t get the authors out of the middle, but at least it compensates them for the inconvenience. There are precedents for this type of compensation, too. Amazon and Macmillan reached a similar deal to pay authors a “Kindle Outage Adjustment” back in 2010, after Amazon temporarily disabled the “Buy” buttons on Macmillan books during a dispute over ebook pricing. SFWA’s approach to Amazon’s offer should be to urge Hachette to negotiate and do everything possible to facilitate such payments. It should insist that any compensatory payments will not be counted as royalty income and will be paid directly to the authors, above and beyond any unearned advance.

While the main thrust of this advocacy should be aimed at Hachette, at least initially, I can see also urging Amazon to make a fairer offer in which the payment to authors is more evenly shared, and, if Hachette doesn’t budge, it would be reasonable to approach Amazon about paying out these moneys directly to authors, bypassing Hachette entirely. If Amazon acknowledges that it has harmed these authors and wants to make them whole, surely it would have no problem paying them directly.

Wishful thinking? For over a year, Amazon’s subsidiary Audible directly paid authors one dollar for every audiobook of theirs sold if they signed up for the program. This was not a royalty. It was unrelated to whatever contractual arrangement the author had to his or her publisher. It was an honorarium; a gift. So Amazon definitely has the technical ability to do it again with Hachette authors. If some authors didn’t register for the program, either the Authors Registry (run by the Guild, so they might not be interested) or the Authors Coalition’s Individual Author Distribution system could be used to find and pay them.

I hope that this approach would be viewed as pro-author, neutral towards the combatants, and would help to reassure those who thought SFWA’s participation in the Preston letter was siding with Amazon.

13 comments
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"While the main thrust of this advocacy should be aimed at Hachette, at least initially,"

Yes, this. Regardless of what it happening within the Hachette/Amazon negotiations, it is Hachette that's contractually bound to their authors. I've been puzzled by the seeming assumption Hachette isn't able to do anything to help its authors.

Hachette didn't punish the authors; Amazon did. Hachette and Amazon are in contract negotiations. Nothing about that circumstance requires Amazon to use tactics worthy of the mob trying to shake down a local shop for protection money. Why should Hachette reward Amazon for unethical practices under the guise of "it's just a business method?"

If Hachette and Amazon do not currently have a contract, then I would say Amazon is already trying to help authors -- it would be well within its rights to not sell anything from Hachette until a deal is signed setting terms. (Imagine taking someone else's property, selling it for them, and saying you'll agree on terms later! That's not how any business works.) However, that's not what they did; they kept selling so that the authors wouldn't completely be out in the cold.

I don't agree with everything you've said here, Victoria, but you make a number of good points, and this is a reasoned and reasoning essay amidst a sea of passionate side-taking, reality-free accusations, logic-deificient rhetoric, lazy journalism, and pointless trolling.

In particular, you make some constructive suggestions which I (and probably many others) would be very pleased to see various parties carry out and follow through on--though I cannot claim any optimism about that actually happening.

I agree with Erin -- the contract between Amazon and Hachette lapsed some months ago. Hatchette has been dragging its feet on renegotiating since January (as stated by Amazon, and not refuted by Hachette) and only Amazon's actions in removing preorder buttons and discounting etc. got any response from Hachette at all. Clearly such tactics were necessary.

Amazon could have removed all Hachette products from its site completely in March, and certainly in April, after the month's grace period they offered expired, and been not only within their rights, but within strict legal requirements as I understand them. Amazon is going out on a potentially thin limb by continuing to sell Hachette books without any kind of a contract in place, and that helps Hachette writers as much as Amazon.

If Hachette wants this settled (and wants to help their writers) they'll get their butts to the negotiating table and work in good faith to hammer out a new agreement. Going weeks or months between responses to a business partner with whom you're currently out of contract is not IMO how a pro does business.

Amazon already made the exact same offer Macmillan got, weeks ago, to set up a fund 50/50 with Hachette to compensate authors for losses. Hachette effectively said, "Thanks but no thanks; we can talk about that sort of thing after we cut a deal."

To be fair, that's probably a reasonable position for them to take; after all, they can't even know just how much total compensation authors should get for the loss until it's over. But for some reason most Hachette advocates, including Preston, seem to act as if Amazon never made the offer at all.

Something else I think begs for discussion, which you didn't mention at all, is Amazon's depiction of the timeline of the talks with Hachette in the letter in which it made its offer. Amazon says, effectively, it tried to contact Hachette several times, including going ahead and extending its contract terms a month after their expiration, but Hachette never deigned to respond until Amazon imposed its sanctions, and it's still stonewalling.

It's easy to say we can't necessarily take that at face value since it is, after all, only Amazon's side of the story—but on the other hand, Hachette didn't call Amazon out for lying about it in any of its responses that I've seen, and up to that point we pretty much only heard Hachette's side of things (and largely via anonymous leaks from within the company or complaints by its authors rather than its own official statements).

Seems to me it's hard to have a negotiation if one side isn't interested in making timely responses.

I did a video blog about this yesterday (link below) making many of these points and some additional ones (e.g., press reports indicate that Amazon wants POD rights if Hachette stops printing a book - there goes any hope of a reasonable reversion clause?). Full disclosure: I'm a Hachette (Orbit Books) author, and SFWA member.

You may have to cut and paste this: https://www.youtube.com/user/therealtcmccarthy/videos

The Preston letter had some appallingly misused language and contrary ideas for something that was penned by a writer or group of writers.

The term "boycott" is inflammatory and just outright wrong. If Amazon was boycotting Hachette authors, their books would have disappeared from the site entirely. All they lost were preorder buttons (reasonable since Amazon can't assume they'll have a contract in place to supply those books in the future) and notices of possible delayed shipments.

Preston also whined about the fact that Hachette books are not being discounted like other books Amazon sells. This complaint is just plain silly. I think we can all remember how this all started two or three years ago: publishers complaining that Amazon was using predatory pricing to gain market share. They were mad that Amazon was discounting their books. Now, they are mad that Amazon isn't discounting their books. This comes across as a small child throwing a fit over receiving the wrong toy at Christmas.

I do feel bad for the Hachette authors who are in the middle of this. However, I think their anger is directed at the wrong dog in this fight.

If Amazon sets a price range for all of their publishers, but a publisher really doesn't WANT to sell their wares in Amazon's price range, then smaller ebook sellers who wish to negotiate with Hachette (or others) for the ability to distribute their ebooks will be stuck doing business Hachette's way.

Amazon can brain Hachette because Amazon commands the largest chunk of marketshare in book sales. Yet smaller companies won't be able to stand up to Hachette et al. the way Amazon has.

In the end, smaller companies will be told, "No. You sell our product for our price." The end result: smaller sellers go out of business.

Is it right for one company (Amazon) to effectively set the price of a product for ALL similar such companies?

The Internet being what it is, access to the market makes shopping for the best price quite easy. In order to stay competitive, smaller sellers will have to be able to match Amazon's price which, in this case, is unlikely to happen.

Both of them need to chill the @$#& out and do what's right: Amazon needs to stop telling Hachette what they can and can't sell their ebooks for, and Hachette needs to realize that they're asking WAY too much for their ebooks.